Responsible Retail & Consumption Highlighted by Climate Confidential

Climate Confidential’s theme of “Unconventional Wisdom” is the fourth and final story from this group of writers who fund their work by Crowdsourcing through Beacon Reader in The United States. This article explores the ways that retailers and resellers of apparel are extending the life and value of their products, as everyone from conscious consumers to fast-fashion fiends get hip to recycled clothes. It’s good for business, but what about for the Earth? Read More

Climate Confidential’s  theme of “Unconventional Wisdom” is the fourth and final story in this issue explores the ways that retailers and resellers of apparel are extending the life and value of their products, as everyone from conscious consumers to fast-fashion fiends get hip to recycled clothes. It’s good for business, but what about for the Earth?

Climate Confidential is a collective of writers who fund their work by crowdsourcing through Beacon Reader in The United States. You too can support writers by going to Beacon Reader.

Come Again? The Rise of Resale Retail

By Mary Catherine O’Connor in Climate Confidential & Beacon Reader (27 April 2014):

Reporters who cover the environment (myself included) are just now recovering from the Earth Day Blitz. As early as January and right up until April 22nd we are hit with a barrage of emails from marketers eager to hawk their eco-friendly, water-saving, organically grown, fair-trade products, as if they are gifts to Mother Earth rather than stuff derived from her belly.

Meanwhile, the greenest choice you can make as a shopper is to buy nothing at all—at least, nothing that requires materials, manufacturing, or shipping. Clothing seems innocuous enough, but according to the World Bank, textile manufacturing generates up to 20 percent of industrial wastewater in China. The other end of the lifecycle isn’t pretty either, especially in the United States. According to the EPA’s 2012 figures, we trashed 14.3 million tons of textiles – or around 90 pounds per person, that year.

That is clearly a conundrum for retailers seeking to cultivate an environmentally responsible image while still boosting revenue. Typically, apparel makers’ bottom line is tied to a basic belief among customers: that they need new things and ought to buy them, season after season. However, a handful of retailers in recent years have pioneered new models that seek to address their products’ environmental impacts and use of natural resources while still generating revenue. Patagonia and Eileen Fisher are buying back apparel from customers, and then reselling it. H&M is plying consumers to recycle their used textiles by offering store credit to buy more. Programs like these force consumers to look at their wardrobes in a new way. Whether they can also lighten apparel’s environmental toll, however, is up for debate.

Grow, Grow, Grow Your Brand, Gently Down the Stream

On Black Friday (November 25) 2011, the outdoor clothing retailer Patagonia broke new trail in the world of confrontational marketing, launching its Don’t Buy This Jacket campaign with a full-page ad in The New York Times. “Black Friday,” it read, “and the culture of consumerism it reflects, puts the economy of natural systems that supports all life firmly in the red.”

The ad campaign also launched a partnership with eBay, through which consumers who take the retailer’s Common Threads pledge to only buy what they need, repair what they can, and recycle the rest, would have their used Patagonia clothing postings appear both on eBay and on Patagonia’s Common Threads page. That boosts their chances of a sale.

To date, nearly 70,000 people have taken the Common Threads Pledge. They’ve sold 57,000 Patagonia items through the eBay and Patagonia online storefronts in the U.S. and U.K. That mountain of fleece and Gore-Tex represents 57,000 potential retail sales that Patagonia did not make—not that anyone at the Ventura, Calif., based company noticed a lull at the tills. As a business, Patagonia had been thriving before the Don’t Buy This Jacket campaign – part of a wider growth in the outdoor gear industry – and since its launch, sales continued to grow—by 30 percent, in fact.

“Sales have continued to rise since the ad, absolutely,” said Nellie Cohen, a Patagonia corporate environmental associate. But she contends that the growth is not just the result of the ad campaign. Its customers also respond to the company’s effort to be transparent and responsive to environmental impact, so if they’re going to invest in outdoor gear, they invest in Patagonia.

The apparel maker, which began selling fleece made from recycled plastic beverage bottles before some of its younger customers were even born, is also advancing sustainable textile technology. Last year it established a venture fund called $20 Million & Change and just this week announced its first investment in a Denver-based startup called CO2Nexus, which uses liquid CO2 to process fabrics, displacing the need for water or energy-intensive dryers.

Yet, the tension between rolling back its environmental impact while still growing was clearly agitating Patagonia founder Yvon Chouinard during a business conference last year hosted by GreenBiz.com “The elephant in the room that no one talks about is growth,” he said, adding that Patagonia failed in its intentions, dating back to the 90s, to stay small and shrink its product line. “We didn’t pull it off. We were being pulled to grow, grow, grow. But we’re readdressing it now.”

One means to this end, he said, is to add functionality into each product while winnowing out superfluous items—essentially making them more valuable, durable, and harder to part with. Patagonia is also tinkering with its sales model. In October 2012, the retailer began experimenting with mini resale shops inside four of its stores across the U.S. Customers could bring used durable gear (things like waterproof shells and down jackets) into the store and “sell” it back to Patagonia in exchange for store credit—generally for around half the value the store managers expected to be able to resell the apparel.

In September 2013, three more of these “Worn Wear” shops opened in Chicago, Palo Alto, Calif., and Seattle. But in January, Patagonia discontinued the program in all but the Portland store. Being able to dedicate adequate space inside the stores for the Worn Wear shops was a major issue, said Cohen. “It’s a very intense business process, in terms of running a resale business inside a regular store, so we need to figure out a better system.”

Does that mean we might soon see entire brick-and-mortar stores dedicated to reselling Patagonia clothes? “Anything is on the table,” she said. “We do love the concept, so it’s just figuring out what makes the most sense.”

High-End Rethreads

Four years ago, the eponymous women’s apparel company Eileen Fisher began collecting used apparel from its nearly 1000 employees. “We have so much clothing, it’s like a sickness,” admitted the company’s director of social consciousness, Amy Hall. The plan was to launder, repair (if needed) and resell the garments. They were available only in the Eileen Fisher Lab store, a special boutique near the company’s Irvington, New York, headquarters. The Lab store also sells factory seconds and samples to raise funds for the Eileen Fisher Foundation, which supports programs for women and girls.

In addition to used items from employees, the company began asking for items from consumers. Unlike Patagonia’s Worn Wear, Eileen Fisher offers a $5 store credit for each piece of apparel brought into the store, whether it is a scarf or a cashmere sweater. “That opened the flood gates,” said Cheryl Campbell, managing director of the Eileen Fisher Community Foundation.

When Eileen Fisher, the founder, learned that the inventory of used garments had quickly grown to 35,000 units, she realized it was time to start a separate venture, dedicated to selling used clothing. In March 2012, the first Green Eileen retail store opened, in Yonkers, New York. Last year, a second opened in Seattle.

“I had no idea what the supply chain would be,” said Campbell. “That was my primary worry, but it’s no longer a worry.” That’s thanks largely to a successful ad campaign that launched in time with Earth Day last year. The ad’s tagline simply reads: “We want our clothes back now.”

While it didn’t match the shock factor of “Don’t Buy This Jacket,” it did pique the interest of Eileen Fisher loyalists, who brought in 70,000 Eileen Fisher garments to stores across the country in the few months following the campaign. A total 150,000 garments were collected throughout the year, and that helped the Green Eileen stores reach $1.5 million in sales last year.

Factor in the costs of running these retail stores, staffing them, collecting, shipping, cleaning and (if needed) repairing all those pieces of apparel, and the $3 million in sales that Green Eileen has generated since it launched in 2009 is not enough for the project to turn a profit. But the company expects a 25 percent jump in sales in 2014 that should cover organizational costs and allow the venture to break even.

Shoppers browse the resale retail racks. Photo: Green Eileen

Initially, Green Eileen was operated through the nonprofit Eileen Fisher Foundation. That meant it could not advertise or benefit from economies of scale from within the corporation and had to outsource everything from facilities management to graphic design. Now that it is transitioning to the company, Green Eileen has a better chance of making a profit in the coming years. Most items sold in Green Eileen stores sell for a third of the original price—though new items, still bearing their original tags, fetch half of the original price.

Emotional Attachments, Survival Tactics

Like Patagonia apparel, Eileen Fisher clothing — much of it flowing tunics and sweaters in rich fabrics and conservative pallets — is a premium product that devotees hold in high regard. Campbell said consumers often approach Eileen Fisher in public. Someone might come up and say, “Eileen, do you remember that blue dress from 2002?” and then will tell her a personal story that relates to that dress. “And they are reluctant to get rid of these items. Women of a certain age, we change sizes and hair colors. But we’ve invested in these clothes and we don’t want them to go to waste.”

Likewise, climbers, mountaineers or other outdoor adventurists might associate the emotions they felt during their most intense or rewarding outings with the Patagonia jacket that kept them dry.

These are the exceptions, however. In the U.S., most of our clothing is utilitarian and, increasingly, fleeting.

In 1999, the Environmental Protection Agency estimated that U.S. consumers tossed all but about 13 percent of their clothes into landfills, once they were done with them. Since then, the percentage has only inched up to 15.7 percent, while the quantity of clothes being trashed has grown. Mattias Wallander, CEO of textile recycler USAgain, said that uptick is due largely to “fast fashion,” the type of trend-focused, low-quality, low-cost clothes from stores like Forever 21 and Hennes & Mauritz AB (H&M).

Teens (and many adults) love this stuff, but fast fashion has suffered from public image problems, and not only because the clothes have short life cycles. In 2012, a fire in a Bangladeshi garment factory that killed more than 100 people exposed the dangerous working conditions inside garment factories linked to many fast fashion purveyors.

H&M is one retailer that has been working to clean up its image and bolster its environmental credibility. Its textile factories have reduced water consumption by 65 percent, and the company recently launched a line of denim made from 20 percent recycled fiber.

It has also gotten into the resale market, but takes a very different approach. Bringing in used textiles—of any brand, not just H&M, earns shoppers a credit toward future purchases. The retailer then sells the collected clothes to textile collection services provider I:CO. Levi Strauss & Co. is also working with I:CO to establish take-back points in San Francisco (to meet the city’s goal of having zero landfill waste by 2020), the U.K. and France. The jeans giant has also significantly reduced the amount of water its factories use and is sourcing raw materials from recycled plastic bottles—it has used 9.4 million of them in 1.2 million pieces of apparel so far. It is also starting to make products with repurposed textiles, such as a limited edition Parachute Trucker jacket made from U.S. military parachutes.

For a company like H&M that relies on huge volumes and low prices, the motivation to buy back textiles from customers is not just about giving consumers a way to assuage guilt about their packed closets. If it wants to keep offering products with recycled textile content, it needs to help make sure the market for recycled fibers is robust.

Technology could play a role in closing the loop on textiles and boosting the quantity of garments that are turned back into new products,  said Jennifer Gilbert, I:CO’s chief marketing officer. As tons of used garments move through sorting facilities, the vast majority of sorting is done manually. I:CO is preparing to run pilot tests this fall to ascertain where radio frequency identification (RFID) or other types of sensor technology, applied to garments early in the supply chain, could make sorting mixed streams of used garments more efficient and cost-effective.

Plus, as clean water becomes scarce and climate trends continue, the environmental and financial costs associated with producing water-intensive crops like cotton are also likely to rise. That will help to make recycled textile more attractive from an economic standpoint.

The Textile Trade

All of this means that now is a good time to be in the textile reuse industry. For-profit companies like I:CO and USAgain exist in order to extend the life of textiles. They service a $1 billion global market of resellers (organizations that sell clothes as clothes) and recyclers (companies that turn unable clothes into wiping rags, upholstery stuff or insulation).

USAgain maintains 14,000 collection boxes across 19 States. Trucks pick up those goods and bring them to 12 different warehouses around the country. The clothes are then moved through a network of sorters and graders that determine which items should remain in the U.S. and what should be sent abroad. Then it’s passed to wholesalers, who sell the goods to thrift stores such as Goodwill. About 50 percent stays in U.S., said Wallander. Of that, 15 to 20 percent is in insufficient shape for resale and is instead sold to textile recyclers.

“We are diverting more and more, we’re not able to keep up with increasing consumption,” Wallander explained, adding that USAgain is growing 10 to 15 percent each year. Collectors are not the only part of the textile reuse supply chain that are thriving. Goodwill Industries’ revenues grew from $67.9 million in 2008 to $105.2 million in 2011.

If the battle is merely between reducing demand for apparel, starting at the beginning of the supply chain, versus increasing the amount of it we reuse or recycle, then reuse is clearly in the lead.

Despite the strong appetite for used textiles, it’s hard not to see H&M’s approach as merely enticing consumers to buy more fast fashion by occasionally dropping off a few dated togs for store credit. It’s a criticism I:CO’s Gilbert has heard before. “I understand the reduce approach – buy less and buy quality. But you have to look at the reality of society. Not everyone will change, so you have to provide other avenues to do the right thing. There are a lot of different ways to go at this problem.”

Besides, it’s not a completely different approach from the one Patagonia and Green Eileen are taking. While clothes brought into H&M will go into the wider reuse and recycling supply chain rather than being resold within the same stores, in all three cases consumers are lured in by store credit…with which they have no choice but to buy more stuff.

Source: www.beaconreader.com/climate-confidential/come-again-the-rise-of-resale-retail